British Gas profits to climb again

British Gas parent Centrica will stoke public anger over energy firm profits when it reveals another jump in annual profits just months after hiking customer bills.

The City is predicting the group's British Gas residential arm will deliver profits of £598 million, up from £544 million in 2011 after last year's colder-than-normal weather provided a boost.%VIRTUAL-SkimlinksPromo%
Its results come amid mounting questions over the fairness of energy prices after British Gas increased tariffs by 6% for around 8.5 million households at the end of last year.

Centrica has already sought to head off consumer backlash by flagging up its importance to the UK economy after publishing a report at the weekend claiming it contributes more than £14 billion through taxes, job creation and contracts with small suppliers.

Chief executive Sam Laidlaw said its contribution to gross domestic product was equivalent to a city the size of Manchester and its tax bill amounted to £158 for every UK household.

Consumer Focus called for greater transparency between profits and prices earlier this month after utility giant EDF revealed a £1.7 billion earnings haul just two months after raising bills for 3.7 million British households.

But Mr Laidlaw said the specially-commissioned study showed that companies like Centrica stimulate growth, with the firm supporting 174,000 UK jobs in 2012 and spending £9.4 billion on goods and services from more than 6,000 UK businesses.

Centrica will also argue that its British Gas division profit margin has not increased despite cost cutting, remaining at 5%. Most analysts are forecasting the wider group to post a 15% rise in operating profits to £2.77 billion.

The results will come after regulator Ofgem's boss Alistair Buchanan warned of inevitable price rises as there is an energy supply crunch as ageing power plants close and the country is forced to import gas.

Mr Laidlaw is expected to provide a full strategy update alongside the full-year results, when it is also set to formally appoint US retail boss Chris Weston to the helm at British Gas, replacing Phil Bentley, who is standing down after six years in the top job.

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British Gas profits to climb again

Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship.

Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so.

To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension.

In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.

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